Transfer of Property Act, 1882 | Chapter II

Section 13: Transfer for Benefit of Unborn Person

Section 13 of the Transfer of Property Act, 1882 regulates a transfer intended to benefit a person who does not yet exist at the date of the transfer. It permits such an arrangement only within the statutory limits: a prior interest must be created by the same transfer, and the interest intended for the unborn beneficiary must comprise the transferor's whole remaining interest in the property.

Full text of Section 13

13. Transfer for benefit of unborn person. Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

Illustration

A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A's second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A's remaining interest in the property.

Meaning and essential requirements

A person not in existence is a person who has not been born or otherwise come into existence when the instrument of transfer takes effect. The provision does not authorise a direct present conveyance to a non-existent transferee. Instead, a valid transfer may create a prior interest in an existing person and then provide for the unborn beneficiary to take the remaining interest.

  1. Transfer by act of parties: Section 13 concerns interests created by a transfer of property and must be read with the other applicable provisions of the Act.
  2. Prior interest: The same transfer must create an earlier interest, typically a life interest, in favour of a person capable of holding it.
  3. Whole remaining interest: After that prior interest ends, the unborn beneficiary must receive the entire residue of the transferor's interest, not merely another restricted life estate.
  4. Other statutory restrictions: The disposition must also satisfy the rule against perpetuity and other relevant legal requirements.

Why the statutory illustration fails

In the illustration, A provides successive life interests and then purports to give the eldest son of an intended marriage only a life interest, with a further interest reserved for A's second son. The eldest son is unborn at the time of the transfer. Because the proposed interest for that son does not exhaust A's entire remaining interest, it fails under Section 13. The subsequent disposition must also be assessed under the connected rules governing failure of prior interests.

Practical examples

Illustrative arrangement capable of satisfying Section 13

A transfers property to B for B's lifetime, with the entire remaining interest to vest in A's future child, subject to the requirements of Section 14 and the child coming into existence as legally required. This illustrates the necessary structure; actual validity depends on all the terms and circumstances.

Arrangement contrary to Section 13

A transfers property to B for life, then to A's future child for life, and thereafter to C absolutely. The unborn child's interest is only for life and therefore does not cover the whole remaining interest. It is ineffective under Section 13.

  • Section 5: Defines transfer of property as an act by which a living person conveys property to one or more other living persons, or to himself and others, as provided.
  • Section 6: States the general rule on transferable property and statutory exceptions.
  • Section 14: Restricts postponement of vesting beyond the period permitted by the rule against perpetuity.
  • Section 16: Governs certain interests intended to take effect after an interest that fails under Sections 13 or 14.
  • Section 20: Unless a contrary intention appears, an unborn beneficiary acquires a vested interest upon birth, though enjoyment may be postponed.

Vesting is different from possession

Under Section 20, the interest may vest when the beneficiary is born even though the beneficiary cannot immediately possess or enjoy the property because a prior life interest continues. The vesting rules do not dispense with the independent requirements of Sections 13 and 14.

Frequently asked questions

Can property be transferred directly to an unborn person?

A direct present transfer to a person not yet in existence is not the mechanism contemplated by Section 13. A properly structured prior interest followed by the whole remaining interest for the unborn beneficiary is required.

Can the unborn beneficiary receive only a life interest?

No. Under Section 13, the interest for the unborn beneficiary must extend to the whole remaining interest of the transferor.

Does an unborn beneficiary immediately take possession at birth?

Not necessarily. Section 20 concerns vesting upon birth, while actual enjoyment can remain postponed until a valid prior interest terminates.

Official statutory source

For the text of the Transfer of Property Act, 1882 and amendments applicable to a particular transaction, consult the Government of India's India Code legislative database. State amendments, the nature of the instrument and other applicable law should also be checked where relevant.

This article explains the statutory rule generally; validity of an individual settlement, trust or deed depends on its exact terms and applicable law.